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THE GOOD

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TENNIS INDUSTRY UNITED

The USTA's bi-weekly newsletter in collaboration with USPTA, PTR, ITA, TIA, and ATA

 

CONTEXT: Tennis Industry United was started during Michael Dowse's tenure as USTA CEO and became quite valuable when it came to disseminating information about Covid-19 and its effects on the tennis ecosystem. Lately, I hadn't paid much attention to it until a friend - let's call him Mr. C - sent me an email with comments about the 4/26 issue. He wrote, "A lot of it looks like it has Michael Dowse's fingerprints on it.  That advocacy paper covers everything. There is no stone left unturned. You can turn a college campus into a community hub and the USTA will help you build your own facility." I looked again and had to agree with Mr. C. Especially two articles jumped out as really helpful: "Turning College Facilities into ‘Community Hubs’" and "Finding Facility and Infrastructure Solutions"

Turning College Facilities into ‘Community Hubs’

This is quite a promising development, in my opinion. I was told it may have been Tim Cass, the man who turned the Univ of New Mexico varsity tennis center into a "community hub". When college and universities are leveraging their tennis courts to make them community hubs, they're killing a whole bunch of birds with one stone. 

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Increasing revenue is a no-brainer, of course. All the benefits are valid reasons to go that community hub route. However, I want to point out the last one. Increasing court occupancy may become increasingly important when the college may (again) think about cutting tennis from their programs as so many did during Covid. 

The information page points to the University of New Mexico, TCU, Kansas University, Old Dominion, and Hope College as schools that are currently engaged in this initiative. Two more comments:

Mr. C wrote, "How many courts in minority areas were built and supported by that USTA consultancy? How many jobs were created? How many minority students were served? (Valid questions. I wished someone at the USTA would actually comment on them.)

My two cents: A local college near my home, L.A. Valley College has 8 beautiful tennis courts that are basically dormant and no one uses them since they don't have a team. The courts are locked and not accessible to anyone. When I approached them in 2019 to use the courts one night a week for my drop-in tennis groups, they presented me with outrageous insurance requirements that would have cost me well over $4,000 a year. For one night a week. Deduct some rainy weeks we could have probably used the courts 40-45 times a year. You do the math.  I hope the colleges that are thinking about the community hub program or are already doing it will not go that route.

Finding Facility and Infrastructure Solutions

 

Anyone in need of help with their tennis facility or with plans to build one, may find this brochure really helpful. It's called the USTA Tennis Venue Services guide created by the USTA Tennis Venue Design Group. It offers Advocacy (!) and Design Services, as well as Technical Assistance, Technology support, and help with Business Development. Looks really good to me. Two more comments:

Mr. C wrote, "They show several pictures of the wonderful USTA facilities they have built with 40 or 50 courts. In their mind, building big facilities is growing the game."

My two cents: I know the USTA has expertise in most of these areas. Not sure about Business Development in light of their shrinking membership and participation base. 

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THE BAD

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FOLLOW-UP: USTA MID-ATLANTIC TURMOIL

CONTEXT: Last month, we reported about another USTA section where former and current staff members told us about a CEO who didn't treat her staff with respect and reigned like Vladimir Putin.

At first, it was just one phone call. "The USTA's Mid-Atlantic section is in a mess. Lost half of their staff in the last year. Leadership sucks." Ouch. That's how it also started in PNW. Then came the confirmations. "CEO runs the section with an iron fist" and "They are the laughing stock in Orlando."

And the reaction from the section leadership after my bombshell report came out? Radio silence, as usual. Typical behavior for people who are keenly aware that the allegations were correct. The fact that the Board President sent me this phony assurance that Mid-Atlantic was the best organization ever before my article appeared shows that she and probably the entire board have absolutely no clue what's going on in their section. I wonder if that's also the case in other USTA sections.

Well, we were told the CEO called an all-staff meeting on April 1 to find out who opened their mouth. "People inside and outside the walls are against her. Three more people are trying to get out." Wow!

Another person wrote, "I know my feelings changed greatly, the day I stumbled on to a little form called IRS 990. It was a public filing of the executive branch salaries and the numbers I saw for the ED, and the rate at which it had increased year over year, literally turned my stomach. The percent increases were outlandish - how could a Board ever approve that? And the thought of the ED making in excess of $300K when they were paying the rest of the staff fairly low salaries was quite troubling, to be honest." Ouch!

Always after reports like this, a large number of USTA section employees sign up for TENNIS CLUB BUSINESS. I should be happy about this. To tell you the truth, I'd rather be happy knowing that all of those organizations act like real non-profits and treat their staff with respect. If you're looting your section, we'll be on your case. That's a promise.

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Anyone reading this who works for USTA national or a section and has evidence of grievances, injustices, or executives enriching themselves with a Board in cahoots, please come forward. We'll guarantee anonymity.

We will never let up! We will be watching all the sections and expect their executives to grow tennis, be professional, and treat their staff with respect.

WE EMPOWER THE POWERLESS!

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THE UGLY

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FOLLOW-UP: USTA DAVIS CUP BLUNDER

Reno Nevada? Excuse me?

 

CONTEXT: Last month I wrote about my disappointment when the USTA had the Davis Cup tie against Colombia played in Reno Nevada instead of what I think was a natural choice, Miami. I wrote, "We unearthed another one of those USTA blunders that resulted in spending a lot of money and missing out on a beautiful chance to market tennis to a huge group of potential players: Hispanics. So, picture this: We were going to play Colombia! Do you think the powers to be at the USTA would capitalize on that very unique opportunity to grow tennis and pick Miami as the match location?"

Anyone with half a brain would have agreed that this was a wonderful opportunity to rope thousands of Colombians into trying tennis for the first time. Or is there another huge opportunity to market tennis to this large group? I don't think so. And where are tens of thousands of Colombians located in the USA? Yes, in Miami! 

Now here comes Randolph Walker, publisher and Managing Partner at New Chapter Media. I just finished his excellent re-published book of Althea Gibson ("I always wanted to be somebody") and loved it.

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So Mr. Walker, a man who hung around the USTA most of his life and could probably be described as the quintessential "company man" doesn't like my sentiment and wrote a lengthy article about it in World Tennis, a publication he owns. The article is titled "Response To Silly Reno Davis Cup Criticism" and made me chuckle. He called my article "a wee-bit off base and a wee-bit illogical" and I found that a wee bit funny. For me, Walker is everything that's wrong in tennis today. Buried in euphoric sentiments about his USTA and salivating about "USA Cheerleaders, the U.S. Davis Cup team mascot “Ace” the bald eagle, the University of Nevada band and the famed “Netheads” U.S. Davis Cup cheer squad." Nice. 

 

The man is all about selling books, I get that. I'm all about growing tennis. The USTA is not. Aren't you getting this, Mr. Walker? Reno was a missed chance for growing tennis and all your touching attempts to kiss up to the USTA don't impress me. Stick to publishing books. You are very good at that!

Reno was a missed chance for growing tennis and all your touching attempts to kiss up to the USTA don't impress me.

I assume Reno paid a large enough check to the USTA to - once again - make them forget that growing tennis is in their mission statement. They SAY they are all about growing our sport but they don't ACT that way. The entire mission statement is as bogus as the PAC numbers they are parading out every year. It appears to me that statement is designed to deceive the IRS, sponsors, and noteholders.

 

In my opinion, here is the essence of the real USTA mission

1. Grow the USTA and all the executive salaries, pensions, and perks.

2. Grow the US Open to pay for 1. 

3. Spend money on prestige programs to create legacies for the leadership.

Seems to me they neither care where that money is coming from nor how anyone's paying for the debt created. But maybe that's why Lew Sherr was elected new CEO?

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THE ROLEX

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NEW USTA CEO: Lewis (Lew) Sherr

Was a Rolex-wielding millionaire really the best choice?

 

CONTEXT: The good ship USTA is listing because of a powerful storm called MASSIVE DEBT. Over $700M is a huge liability that cannot be repaid unless there are drastic changes both on the revenue and the spending side of their business. When Mike Dowse was hired, he must have realized how serious the situation was and, like any business executive worth his or her pay, started on the spending side, wanted to lay off a lot of staff and cut expenses. That didn't sit well with the USTA's good old boys and the deep state that's running the organization. He was gone faster than Rafa's opponents at the French Open.

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Photo: Darren Carroll

The official announcement of Lew Sherr's appointment to CEO reads like a canonization: "In his tenure as USTA Chief Revenue Officer, Sherr has driven all revenue streams for the USTA to record levels including overall sponsorship, broadcast revenue, and attendance and ticketing revenue, and under his leadership, the USTA will ensure the Association’s financial strength and continue to build on the profitability of the US Open." Wow! Let's look at those statements a little closer.

Driven all revenue streams to record levels
That may have happened years ago but certainly not in the past 5 years.

Membership: DOWN means revenue DOWN

Participation: DOWN means revenue DOWN

US Open is a strange animal. It wasn't really profitable because every time sponsorship or broadcast revenue goes up, spending goes up, too. This event should make at least $50M profit each year. Instead, it's either losing money or coming away with just a few million in profit from which Mr. Sherr had to be paid his $1.3M, too. And, because of the aging tennis population combined with the USTA's inability to bring tons of young folks into our sport and the question mark behind ESPN's willingness to renew their contract, US Open attendance will most likely shrink year after year.

Ensure the association's financial strength
That, folks, is quite laughable. While Sherr raked in millions in salaries and "other compensation" the USTA increased their debt by over 1,000%. Let that sink in, folks. I bet the coming years will be really difficult because rather than spending money on rejuvenating tennis from the bottom up, they have to commit an ungodly amount to debt service. Not sure if Mr. Sherr and the Board understand all this. (I know, "rejuvenating tennis from the bottom up" must sound like a foreign language to the USTA board. But their "top-down" programs don't work. I wonder why?)

Continue to build on the profitability of the US Open
What profitability? They're all lying to themselves and to each other thinking the US Open will be able to carry ambitious programs, Network Grants for the sections, and pay down the debt. Over $70M of that debt is due this year alone. How do you do this when the 2021 US Open made only $5M in profits? Or is it $6M? Sherr probably thinks they can continue to do what they have done for the last 5 years: Sell off assets to cover losses so it looks like they are profitable. And all because no one seems to see that only spending cuts and getting rid of high salaries will get the good ship USTA out of those treacherous waters. Am I right, Mr. McNulty? You must know that you could save $40-50M tomorrow if you did the right thing.

The USTA Board could save the organization $40-50M per year

if they did the right thing.

Should we give Lew Sherr the benefit of the doubt?

Sure we should. I mean, I don't know the man. The USTA Board must have been pretty desperate to choose an overpaid salesman as its new CEO.

 

There are just a few things we know about him...

... Lew Sherr was the highest-paid employee of the USTA already before he started his new position.

... Flashing his Rolex he comes across like an overpaid salesman.

... He was an executive present when the organization increased its debt over 1,000% and didn't do anything about it.

... He was present when the tag team Smith/Kamperman mismanaged tennis in a big way in my opinion.

The USTA Board must have been pretty desperate to choose an overpaid salesman as its new CEO.

Here is my humble advice for the new USTA CEO: Show the investors that you're creating value by

  • closing the money pits Player Development and Net Generation.

  • trimming down the operation and the US Open.

  • cutting all salaries including yours.

  • create some excitement so people say, "YES, I WANT TO JOIN THAT ORGANIZATION AND PLAY TENNIS!"

If you think you can get the USTA out of this mess just by increasing US Open revenues, I know someone on Times Square who's got a fake Rolex to sell you.

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